Hi,
I'm about halfway through the two-year initial period of a good tracker mortgage. The plan has always been to remortgage at the end of that rather that accept the SVR that it converts to. I realise that this might in general be harder than it was when I took out the mortgage, but I have a very comfortable LTV, good income vs size of repayments, fairly secure job, etc - so if there's anything still around I should be eligible for it. For the purposes of this question, let's assume it's possible and worthwhile for me to remortgage when the time comes.
My current mortgage is with Nationwide, and is a flexible one into which I can overpay and then, if necessary, withdraw back down to the level I would have been at had I made only the normal repayments. So far I haven't used this facility, mostly to be honest due to apathy. However, I'm thinking that I really ought to put much of the money I have as savings into this instead, leaving only a little as liquid cash to provide an immediate buffer, should I need it, while I get the rest back out of the mortgage.
If I was continuing with my current mortgage forever, I'd just go ahead and do that. However, I'm a bit uncertain how this would work when I come to remortgage. I wouldn't want the "overpayment" part of my balance to be subsumed into the "base" part of the new mortgage, such that I couldn't withdraw it if I needed to. That would effectively wipe out my savings (though admittedly the money would have gone into a reduction of the mortgage cost long term). Although I'm in my twenties, I'm old-fashioned enough to want to keep a good reserve of cash on hand :-)
I assume that swapping mortgages the way I want to is possible - after all, I could just withdraw all my overpayments a month before closing the old one, and then pay them in as overpayments to the new one (possibly bit-by-bit if there's a limit). However, is that necessary? Or is the procedure sufficiently disjointed that I'd be opening one and closing the other as two separate transactions, and could move whatever sums suited me to where I wanted them to be (as long as the results all balanced!)?
Any advice on the general situation welcome too - I'm a relatively recent convert to worrying about money much beyond the balance in my current account :-)
Cheers,
Pete